Crypto News Today: Justice Department Disbands Crypto Enforcement Unit Amid Shift in Regulatory Focus

The move, which comes amid broader deregulatory efforts, reflects President Donald Trump’s evolving vision for the digital asset industry, prioritizing innovation and economic growth over what his administration has called “regulation by prosecution.”

Justice Department Refocuses Priorities

In a memo circulated late Monday, Deputy Attorney General Todd Blanche announced that the NCET was being dissolved “effective immediately.” The team, established in 2022, had been a central force in investigating cryptocurrency-related crimes, especially those involving virtual currency exchanges, fraud, money laundering, and illicit finance.

Trump scales back crypto enforcement as he builds up his digital asset empire. Source: Molly White via X

Blanche stated that the DOJ will now redirect its focus to high-impact criminal investigations where digital assets are used as tools for serious offenses—such as terrorism financing, narcotics trafficking, organized crime, and investor fraud.

“The Department of Justice is not a digital assets regulator,” Blanche wrote. “However, the prior Administration used the Justice Department to pursue a reckless strategy of regulation by prosecution, which was ill-conceived and poorly executed.”

Embracing a Pro-Crypto Framework

This change follows an executive order issued by President Trump on January 23, his third day back in office. The order emphasizes the need for legal clarity in the treatment of digital assets, framing the cryptocurrency industry as essential to America’s role in technological innovation and economic leadership. “We are going to end the regulatory weaponization against digital assets,” Trump declared, vowing to make the United States the “crypto capital of the planet.”

The SEC’s Acting Director moves to undo past crypto rules and drop cases, following “recommendations from DOGE.” Source: Molly White via X

The administration’s pivot has already sparked reactions across the financial and tech sectors. While crypto advocates have praised the move as a victory for innovation, critics warn that relaxing oversight could embolden bad actors.

National Cryptocurrency Enforcement Team Dissolved

The now defunct NCET had been instrumental in prosecuting several high-profile crypto cases, including investigations into mixing and tumbling services, decentralized exchanges, and digital wallets allegedly used to launder funds. It had worked in tandem with FBI cyber units and U.S. Attorney’s Offices nationwide.

The DOJ just scrapped its crypto enforcement unit, shifting focus to serious crimes and ending “regulation by prosecution” under Trump’s blockchain-friendly order. Source: The Meme Times via X

The DOJ memo outlined that ongoing investigations not aligned with the administration’s new priorities would be shut down. Notably, the DOJ will no longer pursue actions against crypto firms for inadvertent violations of regulatory frameworks, such as those related to the Bank Secrecy Act or unregistered securities offerings, unless linked to clear criminal intent.

Industry Applauds Shift Away from ‘Regulation by Prosecution’

Crypto industry leaders and policy advocates welcomed the DOJ’s reorientation. In a joint letter to the administration, executives from firms like Coinbase, Kraken, Gemini, and Paradigm criticized the Biden-era DOJ strategy for stifling innovation and criminalizing developers.

Deputy AG Todd Blanche announced the DOJ is ending “regulation by prosecution” and disbanding its crypto unit, declaring the agency is not a digital assets regulator. Source: Richard Heart via X

“We are heartened to see that the DOJ is redirecting resources to prosecuting bad actors who misuse technology, rather than targeting the builders of our financial future,” said Amanda Tuminelli, executive director of the DeFi Education Fund. Katie Biber, chief legal officer at Paradigm, echoed that sentiment, emphasizing the need for laws to be applied fairly:

“Developers should not be sent to prison for building neutral tools. Laws must mean what they say—not what prosecutors wish they said.”

Trump’s Broader Crypto Vision

President Trump’s alignment with the cryptocurrency ecosystem has extended well beyond enforcement. Earlier this year, he signed an order establishing a Strategic Bitcoin Reserve, suggesting a long-term plan to integrate digital assets into the national financial infrastructure.

US President Donald Trump announced the $TRUMP meme coin launch on January 18, 2025. Source: Donald J. Trump via X

He also launched his own token, $TRUMP, which briefly reached a valuation exceeding $10 billion. While controversial among ethics experts, the token’s success reflects rising market optimism around Trump’s pro-crypto policies.

Meanwhile, agencies like the Securities and Exchange Commission (SEC) and the Federal Deposit Insurance Corporation (FDIC) are following suit. The SEC recently walked back several enforcement cases related to unregistered crypto assets, and the FDIC now allows banks to engage in crypto activities without prior approval—provided risk management standards are met.

A New Era for U.S. Crypto Regulation?

The DOJ’s decision is not without concern. Critics, including anti-corruption analysts and national security specialists, warn that relaxing oversight would provide a loophole for money laundering, sanctions evasion, and illicit finance by foreign adversaries.

The DOJ says it will still target crypto crimes like fraud and scams, warning the industry not to view the policy shift as open season. Source: Amanda Tuminelli via X

Deadly U.S. competitors utilize cryptocurrencies to launder money and evade sanctions,” said Hudson Institute’s Nate Sibley. “It’s hard to see how that aligns with cracking down on cartel cash or sanction enforcement.”

Nonetheless, the Trump administration believes that efficient cryptocurrency regulation should come from intentional financial regulators instead of criminal prosecutors.

In the future, the DOJ will have a limited role in crypto regulation, focusing on cases of investor fraud, large exchange hacks, and digital asset utilization in violent crimes. Prosecutors in the Computer Crime and Intellectual Property Section will continue to provide guidance and coordination among agencies.

Final Thoughts

The disbanding of the National Cryptocurrency Enforcement Team marks a pivotal moment in U.S. crypto policy. As the Trump administration doubles down on its support for blockchain innovation, regulatory strategies are being reshaped to foster what it calls a more “vibrant and inclusive” digital economy.

With crypto assets increasingly seen as instruments of both economic potential and financial crime, the balancing act between growth and security will remain a defining challenge for policymakers in the digital age.